Bauer v. Stern Finance Co.

• Decision Date: 24 July 1969
• Docket Number: No. 53280,53280
• Citation: 169 N.W.2d 850
• Parties: Herman BAUER, Appellant, v. STERN FINANCE COMPANY, Ben Stern, Don W. Sweeten and Arthur Camenzind, Appellees.
• Court: Iowa Supreme Court

Page 850

169 N.W.2d 850

Herman BAUER, Appellant, v. STERN FINANCE COMPANY, Ben Stern, Don W. Sweeten and Arthur Camenzind, Appellees.

No. 53280.

Supreme Court of Iowa.

July 24, 1969.

James Furey and Leighton A. Wederath, Carroll, for appellant.

Joseph Z. Marks, Des Moines, for appellees.

LeGRAND, Justice.

This controversy involves relatively simple facts which have been unnecessarily complicated by a prolix record including 210 pages of pleadings, motions and rulings. Much of this could have been omitted.

The principal dispute concerns the interpretation and effect of summary judgment rule 237, Rules of Civil Procedure, which was extensively amended effective July 1, 1967.

The plaintiff appeals from a summary judgment entered against him by the trial court dismissing his petition on two grounds: First, that plaintiff has refused to furnish important information to defendant either by deposition or at the hearing on summary judgment because such information would tend to incriminate him; and second, that there was no genuine issue as to any material fact and that defendant was entitled to a summary judgment as a matter of law. We discuss these grounds together.

Prior to the 1967 amendment to rule 237, summary judgment relief was available only to a plaintiff. International Milling Co. v. Gisch, 256 Iowa 949, 955, 129 N.W.2d 646, 649. The amendment makes it applicable to plaintiff and defendant alike.

The background of this litigation is a bitter one. By a series of transactions extending from 1962 to 1964, plaintiff purchased 96 head of cattle, all of which he financed through defendant Stern Finance Company. On or about February 9, 1966, Don W. Sweeten, one on Stern's employees, visited plaintiff's farm to make a routine check of his employer's security. He was able to locate only 34 cows on plaintiff's farm. He immediately sought the plaintiff out at his place of employment, made inquiry about the missing security, and, with plaintiff, returned to the farm for further investigation. Six more animals were then located, making a total of 40, and leaving 56 still unaccounted for. Plaintiff refused to divulge any information concerning them. Sweeten claims he thereupon told plaintiff Stern Finance Company would be obliged to declare the entire amount of the loan due, as it was entitled to do under the terms of the various security instruments.

Arrangements were made for one Arthur Camenzind, a cattle broker from Nebraska, to purchase plaintiff's livestock. He visited the farm, at which time Sweeten was present during part of the negotiations. Together the three worked out a deal by which Camenzind purchased the 40 cows for $5150.00. He gave a check for this amount to plaintiff, who endorsed it and delivered it to Sweeten to be applied on plaintiff's indebtedness with Stern. Prior to the consummation of this transaction Sweeten had assured plaintiff Stern would claim no deficiency of him, although the amount of the check did not cover the entire debt.

Whether the cattle were sold to Camenzind by plaintiff or were first repossessed by defendant Stern Finance Company and then sold to Camenzind is one of the areas of disagreement between the parties.

In any event shortly after Camenzind purchased the cattle, plaintiff brought action against Stern Finance Company and Ben Stern individually in seven counts. Upon motion, five of these were dismissed by order of court.

Of the remaining two counts one asserted a right of recovery because the defendants 'wrongfully, illegally, and tortiously took possession of said cattle from plaintiff.' The other claimed damages for wrongful sale and disposition of the animals after the alleged seizure and for improper application of the proceeds from their sale.

Defendants Stern Finance Company and Ben Stern took plaintiff's deposition, during which plaintiff on approximately 20 occasions refused to answer questions on the ground he would thereby tend to incriminate himself. These questions dealt principally with the location of the 56 missing cattle and how they had been disposed of by plaintiff. On the same ground plaintiff refused to produce certain books and records requested during the course of his deposition.

I. This exercise by plaintiff of his privilege against self-incrimination is the principal issue involved. The Sterns filed a motion for summary judgment on both counts of plaintiff's petition. The motion alleged that 'the pleadings, depositions, answers to interrogatories and admissions on file, together with the attached affidavit and exhibit, show that there is no genuine issue for trial and that the defendant is entitled to judgment as a matter of law.' In support thereof the Sterns set out substantially the facts above related.

Attached to the motion was the affidavit of one Lorna Billyard, assistant secretary of defendant corporation, verifying much of the factual matter stated in the motion. Subsequently the affidavit of Don W. Sweeten was filed, further substantiating the recitations of the motion for summary judgment and setting out in detail the manner in which the shortage of security was discovered, the action taken by the defendant corporation thereafter, and the circumstances under which the security was sold and the proceeds applied.

By way of resistance to the motion, plaintiff filed his affidavit asserting the cattle had been taken from him by Stern Finance Company; that Don W. Sweeten had for some days prior thereto 'embarrassed and pressured him' into turning over his cattle to Stern Finance Company; that he did not sell his cattle to anyone, but rather they were repossessed by the finance company; that when he endorsed the check it was not his free and voluntary act, but was the result of pressure, threat and coercion practiced by the said Arthur Camenzind on behalf of and as a representative of defendant; that he felt 'defeated, strong-armed and unable to pursue my own will in the matter'; that his account with Stern Finance Company was not delinquent; and that Stern Finance Company failed to give him proper credits for refunds, insurance premiums and unearned interest.

There are other allegations in the affidavit but these are sufficient to show its general tenor.

Rule 237 now provides in part as follows:

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'(b) For defending party. A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory judgment is sought may, at any time, move with or without supporting affidavits for a summary judgment in his favor as to all or any part thereof.

'(c) Motion and proceedings thereon. The motion shall be filed at least 10 days before the time fixed for the hearing. The adverse party prior to the day of hearing may file opposing affidavits. The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. A summary judgment, interlocutory in character, may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages.

'* * *

'(e) Form of affidavits; Further testimony; Defense requied. Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or filed therewith. The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, further affidavits, or oral testimony. When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.' (Emphasis added.)

This rule is based on rule 56 of the Federal Rules of Civil Procedure and there are only minor differences between that rule and ours.

The purpose of all summary judgment rules is to avoid useless trials. A party with a just cause should be able to obtain judgment promptly and without the delay and expense of a trial, where there is no genuine fact issue to be decided. Humboldt Livestock Auction, Inc. v. B & H Cattle Co., Iowa, 155 N.W.2d 478, 484, and citations. In ruling on a motion for summary judgment, the court's function is to determine whether such a genuine issue exists, not to decide the merits of one which does.

The rule provides that a party may not 'rest upon the mere allegations or denials of his pleading.' He must set forth specific facts showing there is a genuine issue. He cannot merely say there is one; but it must appear 'by affidavits or otherwise' that this is the case.

It is clear the trial court's ruling granting summary judgment for defendants Stern Finance Company and Ben Stern was on the ground that plaintiff had refused to supply vital and material information both in his deposition and in the hearing on the motion. As already pointed out, this refusal was on the ground the answers would tend to incriminate him.

Plaintif insists he was justified in refusing to answer under the protection of Amendment 5, Constitution of the United States. This is conceded, and the trial court so ruled. This does not mean, however, that plaintiff may rely on his constitutional safeguard and yet go forward with his claim against another when that claim depends on information he refuses to divulge. Plaintiff is not the only one who has rights. Under rule 237, defendant may demand disclosure of specific facts which plai...